*See the navigation bar at the right side of the technical note text for supplementary materials.

Technical Note
Gross Domestic Product
Third Quarter of 2011 (Advance)
October 27, 2011
This technical note provides background information about the source data and estimating methods used to
produce the estimates presented in the GDP news release.  The complete set of estimates for the third
quarter is available on BEA's Web site at www.bea.gov; a brief summary of "highlights" is also posted on
the Web site.  In a few weeks, the estimates will be published in BEA's monthly journal, the Survey of
Current Business, along with a more detailed analysis of the estimates ("GDP and the Economy").

Real GDP

Real GDP increased 2.5 percent (annual rate) in the third quarter of 2011, following an increase of 1.3
percent in the second quarter.  The acceleration in real GDP in the third quarter reflected accelerations
in consumer spending and in nonresidential fixed investment and a smaller decrease in state and local
spending that were partly offset by a larger decrease in inventory investment.

Source Data for the Advance Estimate

The advance GDP estimate for the third quarter of 2011 is based on source data that are incomplete and
subject to revision.  Three months of source data were available for consumer spending on goods; shipments
of capital equipment, including aircraft; motor vehicle sales and inventories; manufacturing durables
inventories; federal government outlays; and consumer, producer, and international prices.  Only two
months of data were available for most other key data sources; BEA’s assumptions for the third month are
shown in table A.  Among those assumptions are the following:

*	an increase in nondurable manufacturing inventories,
*       an increase in non-motor-vehicle merchant retail and wholesale inventories,
*	an increase in exports of goods, excluding gold, and
*	an increase in imports of goods, excluding gold.

Prices

The price index for gross domestic purchases—the prices paid by U.S. residents for goods and services
wherever produced—increased 2.0 percent in the third quarter after increasing 3.3 percent in the second.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.8 percent
after increasing 2.7 percent.

Change in Source Data for Investment in Aircraft

Beginning with the third quarter of 2011, BEA’s current quarterly estimates of private fixed investment
in aircraft are based, in part, on data from the Census Bureau’s Manufacturers’ Shipments, Inventories,
and Orders (M3) on nondefense aircraft shipments.  Previously, the quarterly estimates of aircraft
investment were based on data on the value of complete aircraft shipments from the Census Bureau’s
Current Industrial Report (CIR) program.  The Census Bureau terminated the CIR program, and the final
aircraft data through the month of July were released on September 9, 2011.  For more information,
see the FAQ on BEA’s Web site, “How will the discontinuation of the Census’s Current Industrial Reports
affect BEA’s quarterly estimates of private fixed investment in aircraft?”


Carol E. Moylan
Bureau of Economic Analysis
(202) 606-9612